Giving fund reforms: distribution rate and smoothing
The Tax Institute welcomes the opportunity to make a submission to the Treasury in respect of its consultation paper Giving fund reforms: distribution rate and smoothing (Consultation Paper).
In the development of this submission, we have closely consulted with our National Not-for-Profit Technical Committee to prepare a considered response that represents the views of the broader membership of The Tax Institute.
Our submission addresses the questions raised in the Consultation Paper concerning the regulation of private giving funds (PGFs) and public giving funds (PuGFs).
Drawing on the Productivity Commission’s Future Foundations for Giving Inquiry report (PC report), the Consultation Paper, and the practical experience of our members in the philanthropic sector, our submission highlights the crucial role giving funds play in supporting Deductible Gift Recipient (DGR) charities, and outlines certain concerns regarding proposed changes to distribution rates, fund longevity, and the proposed principle of smoothing.
Giving funds are essential to Australia’s philanthropic ecosystem. Their ability to operate effectively in support of long-term, strategic philanthropic initiatives should be safeguarded. The Government’s approach should take into account the unique value these funds provide and not focus solely on their fiscal implications. A balanced regulatory framework that respects donor intent, fund diversity, and economic realities will best serve the charities sector and the community.
Our detailed response and recommendations are contained in Appendix A.
The Tax Institute is the leading forum for the tax community in Australia. We are committed to shaping the future of the tax profession and the continuous improvement of the tax system for the benefit of all. In this regard, The Tax Institute seeks to influence tax and revenue policy at the highest level with a view to achieving a better Australian tax system for all.